Competitive Advantage through Sustainable Business

          May 16, 2001  Paul Hawken Keynote Speaker

          Full day seminar given at Dominican University

 

Link to coverage of those events at Dominican University: www.dominicanuniversity.edu

 

Summary:

How do we simultaneously sustain the earth and economics?

 

It will probably require that business attaches costs to basic resources and assets that it presently values as nothing in its cost accounting analysis.  This would require a significant cultural shift in how businesses presently produce material goods. 

 

In recent years some might refer to this as Green Accounting.  Under Green Accounting, the depletion of oil, gas, the destruction of mountain sides for coal extraction, the pollution of rivers and smogging of air would have assignable costs and would be part of the product cost equation.

 

The question posed in this cultural shift to Green Accounting is:  Does a natural resource have a book value before it is transformed into something saleable?

 

Paul Hawken’s books probably addresses that question in many more words.  Some of the thought provoking phrases from his presentation:

Earth does not come with an operating manual…  Do not adjust the thermostat…

We can put an electric car on the moon, but not in LA….?

Building nuclear power plants is like building a house without a bathroom…

Bush’s Energy proposal ((just given a day before this conference) is to extend the industrial revolution…

Our present system is so wasteful that the solution has become to export jobs to the undeveloped world…

When 15% of the people feel threatened, people approach a critical mass that can have them turn the system around…

Eighty percent of all material things have been created in the last 20 years….

Referring to housing development models:  It’s like a ponzi scheme.  All new houses are being subsidized by the previous houses.

Natural strategies for sustainable business success must link equity, economic and the environment locally, regionally and globally.  We must use future and renewable resources efficiently and effectively.

 

Promoting sprawl is akin to a business losing its research and development and manufacturing departments to make profits on a quarterly basis.

 

Sustainable Conservation presentation summary:

Sustainable Conservation works through collaborative, problem solving partnerships with the private, public and non-profit sectors to produce environmental solutions that make business sense.

 

They have worked to establish one-stop permitting shopping for farmers wanting to initiate conservation.  An example of their work was their efforts to help farmers see manure as an energy generator.

 

Link to their site:   www.suscon.org

 

Quantum Corporation presentation summary: www.quantum.com

 

Quantum – the hard driver makers – finds themselves exceeding government environmental requirements.  They are exceeding government compliance requirements because earlier than most businesses they saw “economic viability” as a key definition of “sustainability. In other words they saw the waste in their product development and delivery as a “cost” that detracted from their bottom line profitability. In 1994-95 they had in-house skirmishes  over trying to change the company culture to one patterned on sustainability.  In the battles they turned to the market for guidance rather than relying on regulatory requirements.  They negotiated over business deals and by relying on the market have moved their firm closer to sustainable economics.

 

Loew’s Corporation presentation summary:

Loew’s Corporation owns Home Depot or at least supplies lumber to it.  Loew’s was purchasing old growth redwood and clear cutting in doing so.  Environmental activists designed a negative clear cutting ad that was to be released.  When the activists showed what they were going to run to Loew’s, the activists said, “If you stop your clear cutting policies, we won’t run the add.”

 

Loew’s changed their policy and the ad wasn’t run.

 

Tuna fishing was killing dolphins.  A campaign was waged by teachers and their school children to flood the president of the Heinz Corporation with sacks of children’s mail and postcards protesting the dolphin slaughter.  It infuriated Heinz President O’Reilly, and he refused to change fishing policy.  Then one of his braver staffers reminded him that the kids he was offending were his next generation of customers. 

 

The fishing policy was changed in a week.

 

Both stories were used as examples of Value Based Behavior.  The actions valued sustainability and obeying the laws of nature.

 

Ecological Asset Management for Emerging Environmental Markets

wcoleman@epri.com                                  www.epri.com

 

 

EPRI believes ecological assets are measurable in real dollars.   They use science-based results to educate regulatory agencies on the benefits of using its science/economic measurements to value mitigations or trade offs.  They use this approach to produce eco-asset transactions.  A proposed Home Depot development was used as an example.

 

Home Depot wanted to build on a large site that might negatively impact the

Red cockaded woodpecker in Southeast Region (NC).  Consequently, Home Depot found a site a distance from their site where earlier mitigated land had been used to breed Red cockaded woodpeckers.  Those woodpeckers sold for $250,000 per pair.  The Home Depot proponents bought a pair and some nearby land to mitigate the negative impacts their development might have on the Red cockaded woodpecker.

 

Just think how much a endangered talking Woody the Woodpecker would be worth?